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Tuesday, January 12, 2016

The lead commissioner at Rotherham Council has warned that the authority's finances remain "dire" and the estimate of the savings it needs to make in the next three years has increased from £40m to £48.1m, with 500 jobs set to go.

A number of budget saving ideas and ways to increase income are currently going through Council channels as the Authority prepares its budget for next year and beyond.

The latest comprehensive list of proposals sets out that £41m was the target to be saved over the next three years from 2016/17 based on a 9% reduction in Settlement funding from central Government per year.

A council report now states that there "are a number of additional unavoidable or essential service pressures which have been identified in the coming years" that could add up to a further £6.5m to the budget challenge in 2016/17 and could be repeated up to this level in the future years.

The report adds: "The total forecast cumulative Budget challenge over the next three year period is now expected to be in the order of £48.1m; with around £20.9m of this falling in 2016/17 - £14.6m in 2017/18 and £12.4m 2018/19."

Since 2010 the Council has had to deliver budget reductions of £117m and now has around 1,500 fewer jobs. Job losses of around 500 (300 in 2016/17) have been indicated in current savings proposals over the next three years as expenditure is reduced further. The Council has already indicated that it is likely for its workforce to reduce by a further 30% (around 1,500) over the next ten years.

Detailed consultation with staff and Trade Unions on the workforce implications of these proposals is ongoing.

In a letter to the Secretary of State at the end of 2015, Sir Derek Myers, lead commissioner at Rotherham Council, said: "The Council's finances remains dire. The Council's budget position was understated because prior to the Commissioners arriving, the Council had hoped that overspending on children's placements might be balanced out by underspending elsewhere in Children's Services. This has proved a false expectation and indeed with the overrunning of the Adult Social Care budget, has contributed to an overal projected overspend for the year of £12m against original budgets."

Since then, the Council has been awarded one-off £5m government grant for its children's services and is likely to call on reserves to plug some of the gap.

Sir Derek added: "The budget is the biggest single threat to the improvement and ambitions of the Council as frankly every pound we spend on improving Children's Services is a pound that we have to find somewhere else and that potentially weakens other parts of the Council.

"The Council has not yet established a track record for extracting more value from its budget and this will be a new set of skills that will need to be cultivated and practised.

"The budget proposals that we have seen this year are quite crude and we frankly struggled to put a budget together for next year. As I write we still have not seen the detailed grant numbers from the Department for Communities and Local Government and there will be a number of other special grants which are highly significant for us."

With some Government funding announced, the Council now estimates that the allocation for Rotherham's Settlement allocation is some £349,000 less than had been projected, at £104.251m. The Council is set to consider the savings proposals over the coming months and also the potential to raise Council Tax by up to 4%.

Sir Derek added: "The apparent ability of the Council to consider a higher level of Council Tax to pay for social care is welcome and is likely to be utilised by the borough, but of course this is a decision that can only be made by councillors."

Housing, education, public health, planning, highways, leisure, cultural services and planning policy – along with control of budgeting in these areas – are set to move back under the control of Rotherham Council's Cabinet under the proposals put forward by Government-appointed Commissioners, and likely to be agreed by the Secretary of State this month.

Economic growth, town centres and external partnerships are set to remain under the control of Commissioners.

Budget saving proposals linked to economic growth include increasing rents to tenants in business centres, merging teams within the award-winning RiDO team, restructuring the planning and building control services, closing the town centre visitor centre and increasing car parking charges in the town centre.

Despite the potential offer to retain all of future business rates that the Council's teams play a big role in securing, the Council cannot take this into account when setting its budgets.